Sometimes, we need to borrow money to start a business or complete a purchase. But getting credit does not come on a platter. Having solid tradelines on your credit report can increase your chance.
What is a tradeline?
A tradeline is a system that records all the account activities on a borrower’s credit report. It is a robust record mechanism that gathers data on the creditor, the lender, and the credit type.
In addition to the names of the creditors and lenders, a tradeline also contains details of the parties responsible for paying off the loan, payment status, and, most importantly, the account’s payment history.
The payment history is important to financial institutions because it allows them to evaluate the integrity and loan-worthiness of the borrower.
They assess certain factors to generate a credit score for a borrower. Credit reporting agencies place varying emphasis on different factors when evaluating trade lines. However, some of the criteria they consider during their assessment include the number of trade lines, types of trade lines, lengths of open accounts, and payment history. You can buy tradelines from providers like tradelinesupply.
How Can Trade Lines Affect Credit?
Upon receiving a credit application, the lender examines the trade lines on the borrower’s account to ascertain the next line of action. It, therefore, goes that having excellent trade lines is key to a successful credit application.
Let us look at some ways that tradelines can affect your credit.
1. Faster Loan Approvals
Lenders will not part with their money simply because one has written a compelling credit application. In addition to your application, they will also pull out your tradeline report from credit reporting agencies for further analysis. If your credit score is favorable, you will get faster loan approvals.
2. Juicier Loan Offers
Beyond getting speedy approvals, having a solid tradeline on your credit account can allow you to enjoy better loan offers. You will get to enjoy a more generous credit limit.
3. Boost Your Credit Score
No credit history or poor credit score? Buying an authorized user tradeline can positively impact your credit status and, by implication, your credit score.
Let us look at how this works:
- When you are added as an authorized user (AU) to a primary account (usually, an account with a solid credit history), the account’s credit history is reflected on your report as well. This can significantly revamp your credit report and improve your score.
- Another way to add weight to your credit report is by buying seasoned tradelines. A tradeline is seasoned if it has been open for two or more years.
In both cases, you must ensure that you buy tradelines with an excellent credit history in both cases.
In summary, a tradeline is a comprehensive record of a borrower’s credit report. Credit report agencies compile the data and make them available to lenders. Favorable trade lines lead to a good credit score and a positive response from lenders.